HONG KONG (Reuters) - China must be alert to any mutation or changes in the behavior of the H1N1 swine flu virus because the far deadlier H5N1 bird flu virus is endemic in the country, a leading Chinese disease expert said.

Zhong Nanshan, director of the Guangzhou Institute of Respiratory Diseases in China's southern Guangdong province, said the presence of both viruses in China meant they could mix and become a monstrous hybrid -- a bug packed with strong killing power that can transmit efficiently among people.

"China, as you know, is different from other countries. Inside China, H5N1 has been existing for some time, so if there is really a reassortment between H1N1 and H5N1, it will be a disaster," Zhong said in an interview with Reuters Television.

"This is something we need to monitor, the change, the mutation of the virus. This is why reporting of the death rate must be really transparent."

The World Health Organization warned on Tuesday that H5N1 had erupted in poultry in Egypt, Indonesia, Thailand and Vietnam, posing once again a threat to humans.

"First, it places those in direct contact with birds -- usually rural folk and farm workers -- at risk of catching the often-fatal disease. Second, the virus could undergo a process of "reassortment" with another influenza virus and produce a completely new strain," it said.

"The most obvious risk is of H5N1 combining with the pandemic ... (H1N1) virus, producing a flu virus that is as deadly as the former and as contagious as the latter."

Zhong told the Chinese media last week that China may have had more H1N1 flu deaths than it has reported, with some local governments possibly concealing suspect cases.

The doctor is known for his candor and work in fighting Severe Acute Respiratory Syndrome in 2003, when nationwide panic and international alarm erupted after it emerged that officials hid or underplayed the spreading epidemic.

Cover-ups by local governments in 2003 during the SARS epidemic led to the sackings of several officials. More than 300 people died in that outbreak.

China, the world's most populous country, has reported around 70,000 cases of H1N1 and 53 death from the virus.

While some regions simply lack the technology to test for H1N1, other areas have been treating deaths as cases of ordinary pneumonia without a question, Zhong said.

"Some local healthcare authorities are reluctant, unwilling to test patients with severe pneumonia because there's some latent rule which says the more H1N1 deaths, the less effective the control and prevention work in your area," Zhong said.

Zhong said China's health minister Chen Zhu rang him up last week and agreed with his views. A notice then appeared on the ministry's website threatening severe punishment for officials caught concealing deaths from H1N1 swine flu.

WHO reported more than 526,060 laboratory confirmed cases of H1N1 worldwide on November 15, with at least 6,770 deaths. However, it has stressed for months now that the figures were only the tip of the iceberg.

It urged countries to place more resources on mitigating the disease rather then on costly prevention measures or testing everyone. All WHO and the U.S. CDC will say is that "millions" have been infected.